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- The main reason why people are vulnerable to the "gambler's fallacy" and other misperceptions about randomness is that a. the (adaptive) costs of understanding randomness outweigh the benefits b. understanding randomness was not an important adaptive problem in ancestral environments c. probability theory is just too difficult for humans to understand d. it isn't possible in principle for natural selection to design such a mechanismSuppose a social psychologist sets out to see whether having children is related to relationship longevity. He decides to measure relationship satisfaction in a group of couples with children and a group of childless couples. He chooses the Marital Satisfaction Inventory because it refers to “partner” and “relationship” rather than “spouse” and “marriage,” which makes it useful for research with both traditional and nontraditional couples. Higher scores on the Marital Satisfaction Inventory indicate greater relationship satisfaction. The psychologist administers the Marital Satisfaction Inventory to 58 couples—30 are couples with children and 28 are childless couples. He wants to calculate the correlation between a couple’s relationship satisfaction and whether they have children. Which of the following types of correlations would be most appropriate for the psychologist to use?Using the following table, perform ALL FIVE of the techniques for Decision Making under Uncertainty: Maximax, Maximin, Hurwicz Realism (α = 0.7), LaPlace and Minimax Regret. Use the .50 for the probability of a Good Economy and .50 for the probability of a Poor Economy. You must show your work for obtaining the points. STATE OF NATURE DECISION ALTERNATIVE GOOD ECONOMY POOR ECONOMY Sotck market 80,000 -20,000 Bonds 30,000 20,000 CDs 23,000 23,000
- Using the following table, perform ALL FIVE of the techniques for Decision Making under Uncertainty: Maximax, Maximin, Hurwicz Realism (α = 0.7), LaPlace and Minimax Regret. Use the .50 for the probability of a Good Economy and .50 for the probability of a Poor Economy. You must show your work. STATE OF NATURE DECISION ALTERNATIVE GOOD ECONOMY POOR ECONOMY Sotck market 80,000 -20,000 Bonds 30,000 20,000 CDs 23,000 23,000Describe how we can use Markov analysis to make future predictions.Company started divesting their funds when there is a global financial crisis and the interest are way high than normal, which they expect would allow them to earn more during this situation. The theory observed by Honesty is: a. Expectation Theory b. Loanable Fund Theory c. Market Segmentation Theory d. Liquidity Preference Theory Which of the following statements is incorrect? Financial instruments are designed to handle the problem of asymmetric information. Derivative instruments are primary used to shift risk among investors. Financial instruments obligate one party (person, company, or government) to transfer something to another party. In equity and debt securities, the expected return is called dividends.
- 2. Using the following table, perform ALL FIVE of the techniques for Decision Making under Uncertainty: Maximax, Maximin, Hurwicz Realism (α = 0.7), LaPlace and Minimax Regret. You must show your work for obtaining the points. PROFIT ($) STRONG MARKET FAIR MARKET POOR MARKET Large facility 550,000 110,000 -310,000 Medium-sized facility 300,00 129,000 -100,000 Small facility 200,000 100,000 -32,000 No facility 0 0 02. Using the following table, perform ALL FIVE of the techniques for decision-making under Uncertainty: Maximax, Maximin, Hurwicz Realism (α = 0.7), LaPlace, and Minimax Regret. Show the work on an Excel File. PROFIT ($) STRONG MARKET FAIR MARKET POOR MARKET Large facility 550,000 110,000 -310,000 Medium-sized facility 300,000 129,000 -100,000 Small facility 200,000 100,000 -32,000 No facility 0 0 0Use graphical sensitivity analysis to determine the range of probabilities for which each decision alternative has the largest expected value. The payoffs represent projected profits. Write clear conclusion. Round values of p to 3 decimal places.
- 1) Choose the best answer The post-earnings drift is inconsistent withI The weak form efficient market hypothesisII The semi-strong form efficient market hypothesisIII The strong form efficient market hypothesis a) I, II, and III b) I and II c) None of I, II, and III d) I27 01:03:06 eBook Acme's Advertising Strategy Large Budget A B $800 $600 $800 $1200 C D $1200 $1000 Small Budget $600 $1000 Refer to the game theory matrix, where the numerical data show the profits resulting from alternative combinations of advertising strategies for Ajax and Acme. Ajax's profits are shown in the upper right part of each cell; Acme's profits are shown in the lower left. Without collusion, Nash equilibrium is represented by which cell? Multiple Choice D A B and C both О There is no Nash equilibrium in this game.Select the least accurate statement. A) The expected monetary value (EMV) criterion represents the long-run average of uncertain outcomes, so it should only be used for recurring decisions. b) For each possible decision and each possible outcome, the payoff table lists the associated monetary value. c)The certainty equivalent is the certain dollar amount a risk-averse decision maker would accept in order to avoid a gamble altogether. D) For a risk-averse decision maker, the certainty equivalent is less than the expected monetary value (EMV).